Attendees take photos of iPhone X during the Apple launch event on September 12, 2017 in Cupertino,California.

Apple's base of loyal iPhone users "can't wait" to get their hands on the iPhone X despite higher prices and production setbacks, according to HSBC analysts.

HSBC initiated coverage on Apple shares with a buy rating, citing forecasts of a strong iPhone sales season as well as growth in the Apple Watch.

"We believe a very large installed base of loyal, yet patient users can't wait to get their hands on iPhone X," HSBC analyst Steven Pelayo wrote in a note to clients. "We believe unit growth will be driven by the large and loyal installed base of users (approximately 600-700m) that have patiently been waiting for more differentiated products such as the iPhone 8 series, and in particular the iPhone X (and follow-up models)."

Pent-up interest in the X remains despite a delayed product rollout and supply constrictions, but that should be alleviated by then end of the first quarter, the analyst said. That could lead to better-than-seasonal sales in the first half of next year.

Pelayo is predicting 13 percent iPhone unit growth in calendar year 2018, to 247.5 million, with average selling prices also rising 12 percent year over year as Apple raises the price on higher-end and "Plus" models.

The analyst also set his 12-month price target at $193, which is 23 percent higher than Tuesday's close.

"We believe emerging market growth (e.g. India has 1.3 billion people yet only 110 million smartphones shipped last year) will continue to drive units," Pelayo said. "However we believe innovation is still alive and new technologies such as dual camera/3D sensors, OLED displays, foldable screens, AI, AR, and 5G should allow at least flattish growth in highly penetrated or 'replacement' markets, including China."

The analyst also forecasts 20 percent unit growth for the Apple Watch in addition to an 8 percent increase in average selling price in the next calendar year.